T-4/92

VARDAKAS v COMMISSION

J U D G M E N T O F THE C O U R T O F FIRST INSTANCE (Fifth Chamber) 30 March 1993 "

In Case T-4/92,

Evangelos Vardakas, an official of the Commission of the European Communi- ties, residing in Brussels, represented by E. Lebrun and, at the hearing, by E. Boi- gelot, both of the Brussels Bar, with an address for service in Luxembourg at the Chambers of Louis Schütz, 2 Rue du Fort Rheinsheim,

applicant, v

Commission of the European Communities, represented by G. Valsesia, Princi- pal Legal Adviser, and A. M. Alves Vieira, of its Legal Service, acting as Agents, assisted by D. Waelbroeck, of the Brussels Bar, with an address for service in Luxembourg at the office of R. Hayder, of its Legal Service, Wagner Centre, Kirch- berg,

Language or the case: French.

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gives the following

Judgment

Facts

VARDAKAS v COMMISSION

6 By memorandum of 11 February 1991, the head of the unit responsible for indi- vidual rights told Mr Vardakas:

'I have forwarded the documents which you submitted in the course of the formal- ities on your entry into service to the head of the Staff Regulations and Discipline Unit for reference in reviewing the status of the "European Committee for Stan- dardization" in order to determine whether it is an international organization according to the criterion established on 30 May 1986 by the heads of administra- tion, whereby "an organization is to be regarded as an international organization for the purposes of Article 4 of Annex VII to the Staff Regulations only if it sat- isfies the following condition: it was created by States or by an organization which itself was created by States".

In view of his negative response, I regret to have to inform you that you do not meet the conditions set out in the second indent of Article 4(1 )(a) of Annex VII to the Staff Regulations for entitlement to the expatriation allowance.'

7 On 2 May 1991 Mr Vardakas submitted a complaint under Article 90(2) of the Staff Regulations against the decision of 11 February 1991.

8 By letter of 18 October 1991, received by Mr Vardakas on 23 October 1991, that complaint was rejected.

(1) declare the action admissible and well founded;

(2) annul the Commission's decision of 11 February 1991 refusing to grant the applicant the expatriation allowance, and its decision rejecting the applicant's complaint in that regard;

(3) order the Commission to pay the expatriation allowance with effect from 1 January 1991 — less the sum which the applicant has already received by way of foreign residence allowance — together with interest at 10% per annum from the date each monthly payment of the expatriation allowance fell due until the actual date of payment;

(4) order the Commission to pay the costs.

The Commission claims that the Court should:

— dismiss the application as unfounded;

Arguments of the parties

1 3 The applicant submits that the second paragraph of Article 110 of the Staff Regu- lations, which provides that all general provisions for giving effect to the Staff Reg- ulations and all rules adopted by agreement between the institutions can only be invoked against staff if they have previously been brought to the attention of the staff, has been infringed in that the opinion adopted by the Board of Heads of Administration on 28 May 1986 ('the opinion of 28 May 1986') was neither pub- lished nor notified to the staff.

1 4 Mr Vardakas considers that, pursuant to the second paragraph of Article 110 of the Staff Regulations, the opinion of 28 May 1986 cannot be relied on against him and that the decision of 11 February 1991, which is based on that opinion, must there- fore be annulled.

15 The Commission contends that the opinion of 28 May 1986 constitutes only an interpretation of Article 4(l)(a) of Annex VII to the Staff Regulations by the Heads of Administration of the Community institutions. They had established standard criteria on which to base findings regarding the international character of any par- ticular organization. Consequently, the opinion of 28 May 1986 was neither a 'gen- eral provision for giving effect to the Staff Regulations' nor a 'rule' for the purposes of the second paragraph of Article 110 of the Staff Regulations.

Findings of the Court

16 The Court notes that, as Mr Vardakas admitted at the hearing, the complaint made during the pre-litigation procedure contains no reference, direct or indirect, to an infringement of the second paragraph of Article 110 of the Staff Regulations. It is, however, settled that, in staff cases, the forms of order sought before the Court may only have the same subject-matter as the claims in the complaint and may contain only heads of complaint having the same legal basis as relied on in the complaint and, although submissions and arguments made to the Court in support of those heads of complaint need not necessarily appear in the complaint, they must be

18 Mr Vardakas submits that the opinion of 28 May 1986 was adopted contrary to Article 4(l)(a) of Annex VII to the Staff Regulations in that it espouses too restric- tive an interpretation of the term 'international organization' by adding a require- ment not mentioned in Article 4(l)(a), namely that the organization be not only international, but also public.

19 According to Mr Vardakas, his argument that the opinion of 28 May 1986 is unlaw- ful is borne out by the rationale underlying the exception provided for in Article 4(1 )(a) of Annex VII to the Staff Regulations, as set out by the Court of Justice (see Case 1322/79 Vutera v Commission [1981] ECR 127, paragraph 8). According to that judgment, the central issue is not whether or not the international organi- zation in question is a public body, but whether or not the ties established between the official concerned and the country in which he is employed are of a lasting character.

20 Mr Vardakas maintains that there is therefore no difference which can justify dis- crimination between officials who, like himself, were employed by a 'private' inter- national organization and those who were employed, in the State to which they are later posted, by a public international organization as defined in the opinion of 28 May 1986.

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VARDAKAS v COMMISSION

23 He further submits that, contrary to the Commission's contention, the judgment of the Court of Justice in Case 211/87 Nunez v Commission [1988] ECR 2791 con- firms his interpretation of the last sentence of Article 4(1 )(a) of Annex VII to the Staff Regulations, since the Court decided that that provision could not apply in the case of an official who, although he had worked in an embassy in the State to which he was later posted, already had lasting ties with that country, since he had habitually resided there and carried on his occupation there for a long time previ- ously. Thus the Court of Justice placed more importance on the criterion of lasting ties with the country of employment than on the criterion of work done for another State.

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24 Mr Vardakas again stresses that the first opinion adopted by the Board of Heads of Administration on Article 4(l)(a) of Annex VII to the Staff Regulations on 26 and 27 June 1975 ('the opinion of 26 and 27 June 1975'), which was in force for 11 years, interpreted the term 'international organization' much more broadly and that, on that construction, he would automatically have received the expatriation allowance.

25 M r Vardakas maintains that the opinion of 28 M a y 1986, o n which the contested decision is based, gives a definition or interpretation of the t e r m 'international orga- nization' which is incompatible w i t h the provision of the Staff Regulations at issue and that the contested decisions m u s t therefore be annulled.

26 The Commission replies that Article 4(1 )(a) of Annex VII to the Staff Regulations refers to situations in which an official cannot be regarded as having established lasting ties with the country to which he is posted. In that regard there are con- siderable differences between the situation of an official in the service of a public international organization and an official in the service of an international associ- ation governed by private law, even though its members are of different national- ities.

30 The Commission adds that that interpretation is perfectly in keeping with the ratio- nale underlying the exception provided for in Article 4(1 )(a) of Annex VII to the Staff Regulations, as set out in the case-law of the Community judicature. The par- amount consideration in determining entitlement to an expatriation allowance is the official's habitual residence before his entry into service (see Case 21/74 Airola v Commission [1975] ECR 221 and Case 37/74 Van den Broeck v Commission [1975] ECR 235). The concept of expatriation therefore depends on the personal situation of the official, that is to say, on the extent to which he is integrated in his new environment, which is demonstrated, for example, by habitual residence or by the main occupation previously pursued (see, most recently, Case 201/88 Atala- Palmerini v Commission [1989] ECR 3109).

Findings of the Court

31 The question before the Court concerns the interpretation of the last sentence of Article 4(1)(a) of Annex VII to the Staff Regulations, which provides that an expa- triation allowance is to be paid to 'officials ... who are not and have never been nationals of the State in whose territory the place where they are employed is sit- uated, and ... who during the five years ending six months before they entered the service did not habitually reside or carry on their main occupation within the Euro- pean territory of that State [;] for the purposes of this provision, circumstances arising from work done for another State or for an international organization shall not be taken into account'.

34 As regards the wording and context of the provision at issue, the Court first notes that it is contained in an article comprising three parts. The first part sets out the condition which an official must in principle satisfy in order to receive the expa- triation allowance, namely that he must never have been a national of the State in whose territory the place where he is employed is situated. The second provides, by way of an exception to that principle, that an official who, during the five years ending six months before he entered the service, habitually resided or carried on his main occupation within the European territory of that State is not eligible for that allowance. By way of a derogation from that exception, the third part provides that circumstances arising from work done for another State or for an international organization are not to be taken into account. Accordingly, as an exception to an exception, it must be interpreted broadly.

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VARDAKAS v COMMISSION

39 In this Court's view, the fundamental purpose of the expatriation allowance is to compensate for the extra expense and inconvenience of taking up permanent employment in a country with which the official has established no lasting tie before his entry into service. The expenses incurred on first entering into service are compensated once only for each posting to one place by the reimbursement of

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removal expenses and payment of the installation allowance. By contrast, the expa- triation allowance is paid throughout the period of the official's service even though he may have integrated himself in the country of employment.

40 Viewed in that light, it must be recognized that the expatriation of a person is inde- pendent of the special status which, as a member of the staff of a public interna- tional organization, he enjoys under international law. Thus, a person may be an expatriate while not being accorded that special status, just as a person may have that special status without actually being an expatriate (on that last point, see the Nunez case).

41 In this context too, therefore, the term 'international organization' in the last sen- tence of Article 4(1 )(a) of Annex VII to the Staff Regulations cannot be interpreted restrictively.

45 It follows that the narrowing by the opinion of 28 May 1986 of the category of persons entitled to the expatriation allowance as delimited by the opinion of 26 and 27 June 1975 disregards the intention of the Community legislature. The opinion of 28 May 1986 is therefore unlawful on account of its effects.

46 Since the decision of 11 February 1991 was based solely on the interpretation of the last sentence of Article 4(l)(a) of Annex VII to the Staff Regulations given in the opinion of 28 May 1986, the unlawfulness of that opinion necessarily entails that of the contested decision, which must be annulled.

47 Furthermore, it is common ground that the ECS is an 'international organization' within the meaning of the opinion of 26 and 27 June 1975. That classification is confirmed by the fact that, although the ECS was not, admittedly, created by States or by international organizations themselves created by States, it has been recog- nized by States and by international organizations created by States, such as the European Communities, and has been entrusted with tasks in the public interest by those States and international organizations. It follows that the ECS must be regarded as an 'international organization' for the purposes of the last sentence of Article 4(1 )(a) of Annex VII to the Staff Regulations and that the applicant is there- fore entitled to the expatriation allowance as from his entry into service on 1 Jan- uary 1991.

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48 Consequently, the Commission must be ordered to pay the applicant the amounts corresponding to the expatriation allowance to which he is entitled, with effect from 1 January 1991 — less the sum which the applicant has already received by way of foreign residence allowance — together with default interest from the date each amount fell due until the actual date of payment.

hereby:

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VARDAKAS v COMMISSION

1. Annuls the decision of the Commission of 11 February 1991 refusing to grant the applicant the expatriation allowance;

2. Orders the Commission to pay the applicant the amounts corresponding to the expatriation allowance with effect from 1 January 1991 — less the sum which the applicant has already received by way of foreign residence allow- ance — together with interest at 8% per a n n u m from the date each amount fell due until the actual date of payment;

3. Orders the Commission to pay the costs in their entirety.